US Job Growth Likely Accelerated in July

The US economy is expected to have added 65K jobs in October 2026, following a 29K increase in September, with the private sector forecast to account for 64K of the gains. However, seasonal adjustment factors used by the government to filter out recurring fluctuations could weigh on the headline figure. Meanwhile, the unemployment rate is expected to have remained unchanged at 4.2%. Average hourly earnings are projected to have risen 0.3% month-on-month, up from 0.1% in September, although the annual growth rate is expected to have slowed to 2.9% from 3%, marking its lowest level in 5-1/2 years. Overall, the report is expected to point to a relatively stable labor market, with monthly job gains of around 40K considered sufficient to keep pace with growth in the working-age population.

The US economy added 29K jobs in September 2026, following a downwardly revised 133K in August and well below forecasts of 90K. Increases were seen in health care employment (17K), mostly ambulatory health care services (13K) and in hospitals (12K); construction (11K) and manufacturing (9K), mostly plastics and rubber products (5K) and machinery (5K). In contrast, falls were recorded for financial activities (-7K). Employment also showed little change in other major industries, including mining, quarrying, and oil and gas extraction; wholesale trade; retail trade; transportation and warehousing; information; professional and business services; social assistance; leisure and hospitality; other services; and government. The change in total nonfarm payroll employment for July was revised down by 31K to -10K, and the change for August was revised down by 29K to +133K. With these revisions, employment in July and August combined is 60K lower than previously reported.

The US economy is expected to have added 90K jobs in September 2026, following a stronger-than-expected gain of 162K in August. The private sector is forecast to have accounted for 85K of the increase. Employment growth is expected to moderate in leisure and hospitality and local government education, while manufacturing payrolls are projected to post strong gains, as well as construction, partly reflecting continued investment in data centers to support AI. Meanwhile, the unemployment rate is expected to have remained unchanged at 4.1%, hovering near a one-year low. Average hourly earnings are projected to have increased 0.3% from the previous month and 3.2% from a year earlier, marking a modest acceleration from the 3.1% annual increase recorded in August, which was the weakest pace since May 2021. Overall, the report is expected to point to a relatively stable labor market.